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Investing in the world’s leading stocks is now more affordable than ever. There are no restrictions on commission-free trading, and you can also buy fractional shares.

The purpose of eToro is to make investing more convenient and easier. Zero fees, low barriers to entry, and eToro’s user-friendly platform makes stock investing accessible to everyone.

You can also invest in fractional shares. Fractional shares are shares that are less than one share and are part of one share. Fractional shares enable you to purchase shares for the dollar amount you wish to invest.

From technology to healthcare, from New York to Hong Kong – eToro gives traders instant access to stocks on the world’s top exchanges.

Add stocks of a variety of world-leading companies to your portfolio with no commissions.

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How is eToro able to offer Zero Commission Stocks?

The goal of eToro has always been to open financial markets to everyone in a simple and transparent way. eToro firmly believes that anyone, anywhere can and should have unimpeded access to financial markets. Making the platform easy to use, while removing barriers to entry such as stock investment commissions, is very much in line with eToro’s original intentions. It also attracted more customers to choose eToro successively, which in turn allowed eToro to expand the user base and reduce commissions. eToro serves millions of customers in over 140 countries. The larger eToro’s user base, the lower the cost.

In addition to a diverse selection of stocks, eToro also offers other financial assets and services, such as leveraged trades and short orders, from which the fees that fund eToro operations are also clearly displayed on the platform. You can learn more about the fees charged by eToro on this page.

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Why choose eToro to invest in Stocks?

More than ten years ago, eToro set out to open the door of the financial market to all users. Today, more than 10 million registered users can easily and conveniently invest in stocks. The eToro platform is fully regulated by the FCA, ASIC and CySec, your funds are protected by industry-leading security protocols, and eToro will never disclose your private data without your permission.

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7 indicators when choosing company shares for trading

Investing in shares of companies is becoming more accessible. Every year, many companies go through an IPO (public offering on the stock exchange) in order to raise additional capital to scale their business. The growth of novice stock investors who are looking for options to increase their capital is similar.

However, the availability of the stock market and a wide range of financial instruments have raised a number of questions among both investors and novice traders. How to choose a stock to invest? What indicators should the company pay attention to? How and where to buy shares?

In this article, you will find answers to all these questions!

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Choosing a company to invest

The first place to start is to choose a well-known company with a strong brand name. Never invest in what you don’t know. If the company is well-known, and moreover, you yourself are a user of its products, then you should study its activities and financial condition in order to make effective investment decisions.

For example, we previously provided a list of the top 10 stocks to invest in 2022, which brings together all the well-known companies with a stable business model and long-term growth in the value of the shares.

Returning to the question of the analysis of financial indicators, analysts identify 7 key indicators that should be paid attention to in the first place. As an example, consider the performance of Apple.

The analysis of these indicators will allow trading in shares both at the time of the publication of the report, and using shares for long-term investment.

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Where and how to analyze financial indicators for stock trading?

We note right away that American companies publish all financial results on their website in the “Investor relations” section. This is one of the requirements of the regulator of the activities of companies in the United States.

Consider the report for the 4th quarter of 2021 from Apple, which the company published on its website:

1. Revenue or Net Sales

This indicator reflects the amount of money that the company received for the sale of its goods or services. That is, the total revenue of the company before paying any taxes and excluding expenses.

If we analyze this indicator of Apple, it is worth noting a significant increase from the same quarter a year ago, as well as in terms of dynamics for the year. Revenue increased from $274.51 billion to $365.81 billion. This indicator increased by 32% during the reporting period, which has a positive effect on both the company’s financial performance and its shares.

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2. Net Income

If the previous indicator analyzes all cash receipts in the company, then this one shows the net profit that remains in the company after deducting all taxes and expenses. It is these funds that the company can use both for additional development and development of new products, and for paying cash to its investors in the form of dividends.

Analyzing Apple’s net profit, there is also a steady growth both in terms of the quarter and the year. Net profit for the year increased from $57.41 billion to $94.68 billion, up 64%. Positive statistics is also reflected in the growth of the company’s shares.

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3. EPS

This indicator analyzes the profit of the company in the context of one share. If the company has a profit (as we have already seen), then this indicator will have a positive value. There is no standard value here, it only shows how much the company’s profit falls on its one share.

Thus, one share of Apple accounts for $5.67 profit. This indicator also demonstrates positive dynamics and indicates that if you trade stocks today, then in the future you can get more profit from holding positions.

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4. Cost of products

If we analyze profit indicators, then we should analyze the cost indicators. This indicator reflects how much the company spent its cash resources for the reporting period. The cost of products reflects the company’s costs that led to revenue and profit. An important point is the fact that you should analyze the growth rate and compare it with profit.

The indicator increased by 45% (from $104.95 billion to $152.83 billion). Net profit for this period increased by 64% (which was analyzed earlier). Thus, one can easily conclude that the company has achieved positive results: the increase in costs has led to an even stronger increase in profits. Apple uses its financial resources rationally, which means that you can invest in such a company and trade its shares.

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5. P/E

This indicator is analyzed by dividing the current share price by the EPS indicator. Based on the results of the division, one can conclude whether the stock is overvalued or not. If the share price is $175 and EPS = $5.67, then P/E = 30.86. In the current market conditions, this indicator dynamics is more than suitable for investing both in the long term and in the short term.

It should be noted that it is necessary to analyze this indicator in the context of the sector, and if it significantly exceeds the norm, this means that the price per share is too high, given its financial condition and earnings. As an example, you can analyze this Tesla indicator and compare it with Apple.

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6. Dividend

The next indicator to pay attention to is the payment of dividends. Not all companies pay dividends to their investors. This point should be taken into account. But if the company has been in business for a long time and also has a sustainable model that is profitable, then the company may decide to pay dividends to its investors without harming the business and as an incentive for shareholders.

The indicator of dividend payments also shows growth. If a year ago the company paid $14.081 billion in dividends, then for the 2021 financial year, the payment amounted to $14.467 billion. That is, the company increased payments by $386 million over the year. If you were to invest in Apple stock in 2020, you could not only earn income from the exchange rate difference, but also from an increase in the dividend payout per share.

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7. Segment

Last but not least, what to look for when choosing stocks to invest in is when to look at which product or service brings in the most money for the company and what share of the total stock. There are businesses that are built around a single product, but this model is insecure and can have a short-term positive effect (for example, Moderna shares). Also, if the segmentation of the business has many directions, this can serve as a brake on the future growth of the shares (for example, Amazon or Disney shares).

Apple’s biggest profit driver is iPhone sales. At the same time, the company has an optimal balanced amount of goods and services that hedge risks and allow you to earn in each market segment. Sales are growing across the board, showing the resilience of the business. Especially positive dynamics is observed in the most profitable segment – ​​the sale of mobile phones. Growth for the year amounted to +39%.

An important factor in the analysis of these indicators is the fact that it is necessary to compare the dynamics for quarters similar to those before. For example, if we analyze the 4th quarter of 2021, then we need to compare it with the figures for the 4th quarter of 2020. Comparing the dynamics of the 4th quarter with the 3rd quarter of 2021 does not give a complete understanding of the dynamics due to the seasonality of sales, which is present in any business.

An analysis of these key 7 indicators of a company’s performance gives a quick answer to the question of whether to invest in stocks. This is a kind of cardiogram of the company’s work. If a company from quarter to quarter and from year to year demonstrates the growth of its indicators, then this has a positive effect on the dynamics of quotations of the shares themselves.

Finding the most stable companies that show long-term growth also provides intraday or trend trading opportunities. Most novice investors enter into more speculative trades with a short investment horizon. Thus, even if the entry point for the purchase of shares was incorrectly predicted, for a minimum holding of positions, an understanding of financial indicators will make it possible to wait out any corrections in the asset, which is in the order of things for the financial market.

If we consider the most stable stocks that have a working business model, a recognizable brand, as well as positive financial statements, you should use the eToro Portfolio trading terminal, in which there are no commissions for holding transactions and making deals, and most importantly, there is an opportunity to receive payment on dividend shares.

Also, the advantage of eToro Portfolio is the ability to conclude transactions with a fractional volume, which allows you to lower the entry threshold for novice investors.